Labour MEPs have welcomed the announcement of tougher sanctions against Russia but called on the EU to go further.

The European Union will target state-owned Russian banks and their ability to finance Russia’s economy, with European investors banned from buying new debt or shares of majority state-owned banks, which raised almost half of their €15.8 billion (£12.5bn) capital needs in EU markets last year.

Richard Howitt MEP, Labour’s European spokesperson on foreign affairs, in response to the announcement made following the meeting of EU Ambassadors, said:

“This widening of sanctions is a clear step forward, moving on from visa and asset-freezing. We are pleased to see the EU taking heed of the European Parliament resolution calling for an arms and dual-use technology embargo and targeting key export markets such as the financial and defence markets.

“However these sanctions will leave the Russian economy’s biggest sector, oil and gas – worth 68 per cent of export revenues – mostly untouched. The lack of sanctions on this largest sector is disappointing.

“These sanctions do show the EU is leading the way in making real efforts to resolve the Ukraine conflict, going further than previous US sanctions which targeted only two Russian Banks, rather than all Russian banks with more than 50% public ownership.”

It is nearly two weeks since 298 people were killed when Malaysia Airlines flight MH17 was shot out of the sky.

Richard Howitt MEP added:

“In the wake of this barbaric act, the European Union has shown its intent to flex its might and send a clear message to President Putin he must cease all support for the Russian-backed forces in Eastern Ukraine and halt the supply of arms across the border.

“The scale of the crisis we now face needs to be met with a bold and united, robust and coordinated response from the international community.”